The mid-level exception and bi-annual exception are the two key tools that an over-the-cap team typically has at its disposal to sign free agents from other clubs — or to re-sign one of its own free agents, if the player’s Bird rights aren’t available or sufficient.
The year-to-year value of mid-level and bi-annual exceptions – along with several other cap-related figures and exceptions – is dependent on the movement of the salary cap. If the cap increases by 5% from one league year to the next, the exceptions increase by the same rate.
As such, we don’t know yet exactly what those exceptions will be worth in 2024/25, but we can make an educated estimate. The NBA’s most recent cap projection for ’24/25 called for a 4.4% increase on this season’s $136,021,000 cap. Rounded to the nearest thousand, that would work out to a cap of $142,006,000, which is the number we’ll use to project next season’s mid-level and bi-annual exceptions.
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Based on a $142,006,000, here’s what the mid-level and bi-annual exceptions would look like in 2024/25:
||Taxpayer MLE||Room MLE|
The standard mid-level exception is available to over-the-cap teams that haven’t dipped below the cap to use room and whose team salary remains below the first tax apron. It can run for up to four years, with 5% annual raises. Once a team uses the standard/non-taxpayer MLE, that team is hard-capped at the first tax apron for the rest of the league year.
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The taxpayer mid-level exception is for a team whose salary is between the first and second tax aprons, or teams that want the flexibility to surpass the first apron later. It can run for up to two years, with 5% annual raises. Once a team uses the taxpayer MLE, that team is hard-capped at the second tax apron for the rest of the league year.
The room exception is for teams that go under the cap and use their space. Once they’ve used all their cap room, they can use this version of the mid-level exception, which runs for up to three years with 5% annual raises.
Beginning in the 2024 offseason, teams will be able to use the non-taxpayer mid-level exception or the room exception – but not the taxpayer MLE – to acquire a player via trade.
If the cap increases by the maximum amount of 10%, as it has in each of the past two seasons, the non-taxpayer mid-level would start at around $13.65MM, the taxpayer MLE would be worth $5.5MM, and the room exception would be worth approximately $8.5MM.
The bi-annual exception – which can be used for contracts up to two years, with a 5% raise after year one – is only available to teams that are over the cap and below the first tax apron.
It can also only be used once every two years, which will disqualify the Cavaliers, Lakers, and Raptors from using it in 2024/25 — Cleveland, Los Angeles, and Toronto are the only teams to use their BAEs in 2023/24.
A maximum 10% cap increase would result in a bi-annual exception that starts at about $4.97MM in ’24/25.